New Saudi ‘insurtech’ rules will help ‘foster innovation’

SAMA said the ‘insurtech’ rules would give insurance firms that use technology to provide or design their products a flexible regulatory framework to operate in. The rules outline insurtech firms’ obligations on issues like information accuracy. They also include a code of conduct detailing how in-scope firms should deal with customers fairly and not discriminate against clients based on race, gender or other characteristics.

Financial services expert Tom Bicknell of Pinsent Masons said: “The Kingdom’s fintech sector sees no sign of slowing up – and the SAMA insurtech rules are the latest move by the regulator to provide a solid framework to foster innovation along with its other sector specific rules.”

Primarily directed at websites and mobile apps that are used to give advice about, sell and administer insurance products, the rules make it a legal requirement that these businesses obtain licences from SAMA before operating . They also set out detailed rules for the collection, handling and storage of client data electronically and directs the use of digital ‘know your customer’ KYC functionality.

SAMA approved the insurtech rules after holding a public consultation via the National Competitiveness Center's Public Consultation Platform. The central bank said this process was part of its efforts to enhance the Kingdom’s insurance sector .

Bicknell said: “The new rules are focused on consumer protection and ensuring suitable safeguards are in place when new technologies are deployed by insurance market participants. It was great to see SAMA release the draft rules for public consultation ahead of their finalisation, enabling stakeholders to engage with the proposals and with SAMA to ensure they are aligned with industry and consumer goals.”